Operating exposure. ​ Copy-Cat, Inc. has signed a deal to make vintage Nissan​ 240-Z sports cars for the next three years. The company will build the cars in Japan and ship them to the United States for sale. The current indirect rate is ¥114.0659 per dollar. The anticipated inflation rate for parts and labor in Japan is 2.4​%over the next three​ years, and the anticipated overall inflation rate for Japan is 3.4​%over the next three years. The expected overall inflation rate in the United States is 4.7% over the next three years. ​ (The stated rates are on an annual​ basis.) If​ Copy-Cat plans to sell 600 cars a year at an initial price of $40,000 and the cost of production is ¥4,076,500​, what is the annual profit in dollars for​ Copy-Cat? Assume it takes one year for production and all sales revenues and production costs occur at the end of the year. Is this profit rising or falling each​ year? ​ Why?

What is the expected sales revenue per car in dollars for​Copy-Cat in year​ 1?

​$ (Round to the nearest​ cent.)

What is the expected sales revenue per car in dollars for​Copy-Cat in year​ 2?

​$​(Round to the nearest​ cent.)

What is the expected sales revenue per car in dollars for​Copy-Cat in year​ 3?

​$​(Round to the nearest​ cent.)

What is the expected production cost per car in dollars for​Copy-Cat in year​ 1?

​$(Round to the nearest​ cent.)

What is the expected production cost per car in dollars for​Copy-Cat in year​ 2?

​$​(Round to the nearest​ cent.)

What is the expected production cost per car in dollars for​Copy-Cat in year​ 3?

​$(Round to the nearest​ cent.)

What is the expected profit in dollars for​ Copy-Cat in year​ 1? Enter a negative number for a loss.

​$​(Round to the nearest​ dollar.)

What is the expected profit in dollars for​ Copy-Cat in year​ 2? Enter a negative number for a loss.

​$​(Round to the nearest​ dollar.)

What is the expected profit in dollars for​ Copy-Cat in year​ 3? Enter a negative number for a loss.

​$(Round to the nearest​ dollar.)

Will these new anticipated inflation rates affect the production of vintage​ 240-Zs? ​ Why?  ​(Select the best​ response.)

A. The profit​ (loss) is rising​ (falling) each year as the revenue is growing at a higher inflation rate than the production costs despite the weakening yen against the dollar.

B. The profit​ (loss) is falling​ (rising) each year as the revenue is growing at a higher inflation rate than the production costs despite the weakening yen against the dollar.

C. The profit​ (loss) is falling​ (rising) each year as the yen is weakening against the dollar despite different inflation rates in the two countries.

D. The profit​ (loss) is rising​ (falling) as the revenue is growing at a higher inflation rate than the production costs and the weakening yen against the dollar allows for the production costs to fall even more.

QUESTION 1

ABC Ltd is a wholesaler of furniture which has been in operation for ten years. It buys furniture from five major manufacturers and sells them to a range of customers. The company currently has a customer base of over 500 customers most of which are credit customers. The receivables balance comprises customers owing up to $2,000,000 to smaller balances of about $10,000, all with many different due dates for payments and credit limits. The level of receivables is considerably higher than last year and there are concerns about the creditworthiness of some customers.

The company has only recently computerised its operations including its accounting system. Manual invoices, receipts and cheques have been replaced with computer-generated documents. The sub-ledgers are now maintained in the accounting software which have facilitated more timely generation of statements much to the delight of customers. The sales process is initiated by a Purchase Order from the customer which is used to raise a system generated Sales Invoice and Delivery Slip. A copy of the Delivery Slip is given to the Security at the gate for logging and check off to allow passage of goods through the gate; another copy of the Delivery Slip is given for the customer to sign and then returned to the Sales Dept. All information is stored on ABC Ltd’s computer systems. There is no backup of data off site. The client’s staff are helpful although they cannot confirm completeness of documentation for the system.

You are the audit senior in charge assigned for ABC Ltd’s audit and you are in the process of planning the current year’s audit. You are contemplating the changes in the client’s audit environment and the impact that these changes will have on the audit risk and the audit methodology. Your audit assistant is curious why it is necessary to plan the audit from one year to the next. Why not just copy the previous year’s workpapers?

Required

1. Explain to the audit assistant the importance of and some of the benefits [at least four benefits] to be derived from having a tailored audit plan for each audit.

2. (a) Based on your risk assessment of the new computerized information system (CIS) environment, list two inherent risks of CIS you have identified and discuss how these factors impact the overall audit risk

(b) Outline the audit procedure which you will use in response to each risk identified in (a) above in planning the audit?

(c) State the approach for auditing in a computerized environment which you are using to design tests for testing controls over processing of data. Explain the reason for your choice, highlighting the benefits and drawbacks. State any assumption made as to resource availability.

(d) Explain how the choice of approach in (c) above is likely to impact audit risk? Identify the audit risk component which is most likely to be affected.

3. (a) Your audit plan notes that you will be testing the system of internal controls for the ‘three Es’. Explain the ‘three Es’ and the impact these will have on the audit if positive and if negative.

(b) State the audit procedure you will be using for the following:

i) To test the control over completeness of sales

ii) To test the accuracy and existence of receivables balances

(c) List the set of management assertions for “Sales” and “Accounts Receivable” which you will be testing.

ABC Ltd is a wholesaler of furniture which has been in operation for ten years. It buys furniture from five major manufacturers and sells them to a range of customers. The company currently has a customer base of over 500 customers most of which are credit customers. The receivables balance comprises customers owing up to $2,000,000 to smaller balances of about $10,000, all with many different due dates for payments and credit limits. The level of receivables is considerably higher than last year and there are concerns about the creditworthiness of some customers.

The company has only recently computerised its operations including its accounting system. Manual invoices, receipts and cheques have been replaced with computer-generated documents. The sub-ledgers are now maintained in the accounting software which have facilitated more timely generation of statements much to the delight of customers. The sales process is initiated by a Purchase Order from the customer which is used to raise a system generated Sales Invoice and Delivery Slip. A copy of the Delivery Slip is given to the Security at the gate for logging and check off to allow passage of goods through the gate; another copy of the Delivery Slip is given for the customer to sign and then returned to the Sales Dept. All information is stored on ABC Ltd’s computer systems. There is no backup of data off site. The client’s staff are helpful although they cannot confirm completeness of documentation for the system.

You are the audit senior in charge assigned for ABC Ltd’s audit and you are in the process of planning the current year’s audit. You are contemplating the changes in the client’s audit environment and the impact that these changes will have on the audit risk and the audit methodology. Your audit assistant is curious why it is necessary to plan the audit from one year to the next. Why not just copy the previous year’s workpapers?

Required
1. Explain to the audit assistant the importance of and some of the benefits [at least four benefits] to be derived from having a tailored audit plan for each audit.

2. (a) Based on your risk assessment of the new computerized information system (CIS) environment, list two inherent risks of CIS you have identified and discuss how these factors impact the overall audit risk

(b) Outline the audit procedure which you will use in response to each risk identified in (a) above in planning the audit?

(c) State the approach for auditing in a computerized environment which you are using to design tests for testing controls over processing of data. Explain the reason for your choice, highlighting the benefits and drawbacks. State any assumption made as to resource availability.

(d) Explain how the choice of approach in (c) above is likely to impact audit risk? Identify the audit risk component which is most likely to be affected.

3. (a) Your audit plan notes that you will be testing the system of internal controls for the ‘three Es’. Explain the ‘three Es’ and the impact these will have on the audit if positive and if negative.

(b) State the audit procedure you will be using for the following:
i) To test the control over completeness of sales
ii) To test the accuracy and existence of receivables balances

(c) List the set of management assertions for “Sales” and “Accounts Receivable” which you will be testing.

Among its other features, the MyTVLab website allows customers to purchase MyTVLab LifeStyles merchandise online. To handle payment processing, the management of MyTVLab has contracted with the following firms:
,• PayAFriend (PAF)— This is an online payment system with which customers and businesses such as MyTVLab register in order to exchange payments in a secure and convenient manner, without the need for a credit card.
,• Continental Banking Company (Conbanco) — This processing services provider allows MyTVLab custom-ers to pay for merchandise using nationally recognized credit cards issued by a financial institution.
,To reduce costs, management is considering eliminating one of these two payment systems. However, Lorraine Hildick of the sales department suspects that customers use the two forms of payment in unequal numbers and that ­customers display different buying behaviors when using the two forms of payment. Therefore, she would like to first determine the following:
,• The proportion of customers using PAF and the proportion of customers using a credit card to pay for their purchases.
,• The mean purchase amount when using PAF and the mean purchase amount when using a credit card.
,Assist Ms. Hildick by preparing an appropriate analysis. Open Payments Sample. pdf, read Ms. Hildick’s comments, and use her random sample of 50 transactions as the basis for your analysis. Summarize your findings to deter-mine whether Ms. Hildick’s conjectures about MyTVLab LifeStyle customer purchasing behaviors are correct. If you want the sampling error to be no more than $3 when estimating the mean purchase amount, is Ms. Hildick’s sample large enough to perform a valid analysis?

Consider a local used car market with an unlimited number of buyers, 50 sellers of high-quality cars, 30 sellers of medium-quality cars and 20 sellers of low-quality cars. Each seller offers up to 1 car for sale. Sellers of high-quality cars value their car at $15,000, sellers of medium-quality cars at $7,000, and sellers of low-quality cars at $3,000. Buyers value high-quality cars at $20,000, medium-quality cars at $10,000, and low-quality cars at $5,000.
Answer the following questions according to the lemon’s model that we discussed in class.
If buyers and sellers are symmetrically and fully informed about the quality of the cars, ...
(a) ... how many “submarkets” for cars will there exist? (1 mark)
(b) ... what is the total surplus generated in the market for cars? That is, what is the total surplus generated in all “submarkets” together?
If sellers are fully informed about the car quality but buyers do not know the car quality, ...
(c) ... how many “submarkets” for cars will there exist? (1 mark)
(d) ... will high quality cars be traded in the market equilibrium? Explain your answer.
(e) ... can medium quality cars be traded in a market equilibrium? Explain your answer.
(f) ... what is the total surplus generated in the market for cars, assuming as many cars as possible are traded in market equilibrium? (1 mark)
(g) Compute the difference between the total surplus of (b) and the total surplus of (f). In the scenario with asymmetric information from (c) - (f), is the market for used cars efficient? Explain your answer.
(h) Which sellers gain and which sellers lose if we move from the symmetric information situation of (a)-(b) to the asymmetric information situation in (c)-(f)? How much do they gain or lose?

A company estimates that if x thousand dollars is spent on the marketing of a certain product, Q(x) thousand units of the product will be sold, where Q(x)= (7x)/(27+x^2)
(a) Determine the domain of the function defined
(b) Determine how much of the product will be sold if the company does not spend any money on marketing

(c) Determine the amount of money the company must spend on marketing to achieve the minimum and maximum quantities. Leave your answers to 2 decimal places

(d) Determine the maximum and minimum quantities that can be sold. Leave your answer to the nearest whole number.

(e) Determine the marketing expendure ranges on which quantity sold is increasing and decreasing marketing and interpret your solution.

(f)Determine what happens as the company invests an infinitely large amount of money on marketing

(g) Use the information given from (a) to (f) to sketch the curve of Q(x).

Already rated 100%

The business manager of a 90 unit apartment building is trying to determine the rent to be charged. From past experience with similar buildings, when rent is set at $400, all the units are full. For every $20 increase in rent, one additional unit remains vacant. What rent should be charged for maximum total revenue? What is that maximum total revenue?

To help solve the above scenario, perform an internet search for Profit Parabola or Applications of Quadratic Functions. List the URL of one of the applications that you find.

URL ___________________________________________________________________

Go to http://www.purplemath.com/modules/quadprob3.htm to see the process used for determining the quadratic function for revenues R(x) as a function of price hikes x on page 3 with the canoe-rental business problem. Use this process to determine the quadratic function that models the revenues R(x) as a function of price hikes x in the apartment building scenario above. SHOW ALL YOUR WORK!

3. What is the formula for revenues R after   x $20 price hikes in the apartment building?

Graph the function. Clearly label the graph (desmos.com is a great an on-line graphing resource).

Find the maximum revenue (or income) of the apartment building.

What is the rent that coincides with this maximum revenue?

What is the outcome of the rent hike of $20 results in 2 additional vacancies instead of 1 additional vacancy? Recalculate questions 3, 5, 6 for this new scenario.

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.

Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months:

Required:

1-a. Compute the throughput time for each month. (Round your answers to 1 decimal place.)

1-b. Compute the manufacturing cycle efficiency (MCE) for each month. (Round your answers to 1 decimal place.)

1-c. Compute the delivery cycle time for each month. (Round your answers to 1 decimal place.)

3-a. Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE. (Round your answers to 1 decimal place.)

3-b. Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE. (Round your answers to 1 decimal place.)

ASAP due tonight!